Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
|
SPOUSES FERNANDO TORRES and IRMA TORRES,
Petitioners,
-versus-
AMPARO MEDINA and the EX-OFFICIO SHERIFF of the RTC ofQuezon City,
Respondents.
|
G.R. No. 166730
Present:
CORONA, J.,
Chairperson,
VELASCO, JR.,
NACHURA,
PERALTA, and
MENDOZA, JJ.
Promulgated:
March 10, 2010
|
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D E C I S I O N
PERALTA, J.:
Before this Court is a Petition for Review
on certiorari,[1] under Rule 45 of the Rules of Court,
seeking to set aside the August 30, 2004 Decision[2] and January 18, 2005 Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV
No. 75847.
The facts of the case:
On July 28, 1994, respondent Amparo Medina
(Medina) wrote a letter[4] to the Office of the Sheriff, Regional
Trial Court (RTC) of Quezon City, applying for the extrajudicial foreclosure of
mortgage of the property of petitioner spouses Fernando and Irma Torres
(Spouses Torres) which was covered by Transfer Certificate of Title No. RT-61056 (354973) and which
is subject of a Deed of Mortgage[5] dated December
20, 1993.
On May
27, 1997, the Office of the Ex-Officio Sheriff issued a Notice of Sheriff’s Sale[6] and, on June
30, 1997, sold at public auction the subject property to Medina being the highest bidder thereof. A
Certificate of Sale[7] was thereafter issued toMedina.
On September
21, 1999, the Spouses Torres filed a Complaint[8] before the RTC of Quezon City for the
declaration of nullity of the extrajudicial foreclosure of mortgage conducted
by the Ex-Officio Sheriff. The same was docketed as Civil Case No. Q-99-38781.
In their
Complaint, the Spouses Torres raised the following causes of action, to wit:
a) the
December 20, 1993 Deed of Real Estate Mortgage does not contain a period or
term; hence, performance of the obligation has not yet become due as there is a
need for judicial determination of the period or term;
b) the
June 28, 1994 Statement of Account is not the loan contemplated by law;
therefore, it cannot serve as basis to foreclose extrajudicially the mortgage;
c) the
credit transaction is either void or unenforceable due to breach of Section
6(a) of Republic Act No. 3765, otherwise known as “The Truth in Lending Act”;
d) Since
appellee sued appellants for violation of Batas Pambansa Blg. 22, there could
arise a situation of double recovery of damages which is proscribed by law. If
the extrajudicial foreclosure will be allowed and if appellants will be made to
pay the amount of the checks subject of the criminal suit under B.P. Blg. 22,
it would result in the unjust enrichment of appellee.[9]
On July
20, 2000, Medina filed a Motion to Dismiss[10] raising the grounds of res judicata and forum shopping. Medina argued that the Spouses
Torres had filed an earlier Complaint[11] praying for the annulment of the real
estate mortgage involving the same property and which was docketed as Civil Case No. Q-94-18962 before the RTC of Quezon City, Branch 216. Medina contended that said complaint was
already dismissed as evidenced by the RTC’s Decision[12] dated March
7, 1997.
On December
27, 2001, the RTC issued an Order[13] granting Medina’s
motion to dismiss the complaint. The RTC ruled that res judicata was present and that the Spouses
Torres were guilty of forum shopping, to wit:
Thus, it is plain from the foregoing that the present
action is identical to the case filed by plaintiffs against the defendant
before the Regional Trial Court of Quezon City, Branch 216, hence, res judicata lies. The decision of the Regional
Trial Court of Quezon City, Branch 216, dated March 7, 1997, has become final;
the aforesaid court which rendered said decision had jurisdiction over the
subject matter and the parties; the decision was on the merits; and there is an
identity of parties, subject matter and causes of action between the present
action and the case before the Regional Trial Court of Quezon City, Branch 216.
The Court also notes that while the plaintiffs here alleged
separate causes of action in the instant complaint, they are actually using the
very same grounds they have brought before Branch 216 of this Court to support
their claim to annul the foreclosure proceedings. The validity of the real
estate mortgage is again being assailed to ask for the annulment of the
foreclosure proceedings conducted over the mortgaged property. It must be
remembered that the validity of the real estate mortgage has been sustained by
the decision in Civil Case No. 94-18962 which decision has already attained
finality. The test of identity of causes
of action lies not in the form of an action but on whether the same evidence
would support and establish the former and present causes of action. Plaintiffs
cannot avoid the application of res
judicata by simply varying
the form of their action or by adopting a different method in presenting it.[14]
The Spouses Torres appealed to the CA,
which, in similar fashion, ruled that res
judicata had already set in,
the dispositive portion of which reads:
WHEREFORE, the Order dated December 27, 2001 is hereby AFFIRMED and the appeal is
DISMISSED. Costs against appellants.
SO ORDERED.[15]
The Spouses Torres then filed a Motion for
Reconsideration[16] dated August
30, 2004, which was, however, denied by the CA in the Resolution[17] dated January
18, 2005.
Hence, herein petition, with the Spouses
Torres raising the following assignment of errors, to wit:
A. THE
COURT OF APPEALS GRAVELY ERRED WHEN IT IGNORED THAT THE CAUSE OF ACTION IN
CIVIL CASE NO. Q-99-38781 AROSE MUCH LATER THAN THE CAUSE OF ACTION IN CIVIL
CASE NO. Q-94-18962. HENCE, FORUM SHOPPING AND RES JUDICATA DO NOT APPLY.
A-1.
ASSUMING WITHOUT ADMITTING THAT RES JUDICATA EXISTS IN THIS CASE, THE SAME WILL
NOT BE HONORED IF ITS APPLICATION WOULD CONSTITUTE A SACRIFICE OF JUSTICE IN
FAVOR OF TECHNICALITY;
B. THE
COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RULE THAT THE CAUSES OF ACTION
CANNOT BE IDENTICAL IF THE CAUSE OF ACTION IN ONE AROSE AFTER THE JUDGMENT IN
THE OTHER;
C. THE
COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RULE THAT THE EXTRAJUDICIAL
FORECLOSURE OF MORTGAGE INSTITUTED BY PRIVATE RESPONDENT AMPARO MEDINA
CONTRAVENES THE EQUITABLE PRINCIPLE OF UNJUST ENRICHMENT CODIFIED UNDER ARTICLE
22 OF THE NEW CIVIL CODE, AND WOULD AMOUNT TO DOUBLE RECOVERY EVEN AS THE B.P.
BLG. 22 VIOLATIONS ARE STILL PENDING IN THE METROPOLITAN TRIAL COURT OF QUEZON
CITY;
D. THE
COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RULE THAT THE PRIVATE
RESPONDENT AMPARO MEDINA HAS ELECTED HER REMEDY WHEN SHE SUED
PETITIONER FERNANDO TORRES ON A B.P. BLG. 22 VIOLATION, AND ENGAGED THE
SERVICES OF A PRIVATE PROSECUTOR TO PROSECUTE THE SAME. THE FILING OF THE B.P.
BLG. 22 VIOLATION BARS AND EXCLUDES THE REMEDY OF FORECLOSURE OF MORTGAGE.[18]
The petition is not meritorious.
At the crux of the controversy is the
determination of whether or not res
judicata bars the filing of
Civil Case No. Q-99-38781.
Civil Case No. Q-94-18962 vis-a-vis Civil Case No. Q-99-38781
As borne from the records of the case, the Spouses Torres first
instituted Civil Case No. Q-94-18962 before the RTC of Quezon City, Branch 216,
which, among others, prayed for the nullity of the real estate mortgage, dated December 20, 1993.
On March
7, 1997, the RTC issued a Decision[19] dismissing the complaint thereby upholding
the validity of the real estate mortgage, the dispositive portion of which
reads:
WHEREFORE,
premises considered, judgment is hereby rendered:
1. DISMISSING
the plaintiffs’ complaint for lack of merit;
2. Ordering
the plaintiffs, spouses Fernando Torres and Irma Torres, to pay defendant
Amparo Medina, the sum of FIFTY THOUSAND (P50,000.00) PESOS as and by
way of attorney’s fees and to pay the costs of suit.
SO ORDERED.[20]
The Spouses Torres appealed said
Decision to the CA.
On February
18, 1998, the CA issued a Resolution[21] dismissing the appeal, the dispositive
portion of which reads:
WHEREFORE,
IN VIEW OF ALL THE FOREGOING, the appellants’ motion for extension of time to
file appellants’ brief is hereby DENIED for being filed out of time. The appeal
is hereby DISMISSED.
SO ORDERED.[22]
The Spouses Torres then filed a Motion
for Reconsideration, which was, however, denied by the CA in the Resolution[23] dated August
6, 1998.
Aggrieved, the Spouses Torres then
sought relief from this Court.
On July
5, 1999, the Court’s First Division issued a Resolution[24] denying the petition of the Spouses
Torres. On August 16, 1999, the First Division
issued another Resolution[25] denying the motion for reconsideration. On September 7, 1999, an Entry of
Judgment[26] was rendered.
Res judicata literally means "a matter
adjudged; a thing judicially acted upon or decided; a thing or matter settled
by judgment."[27] Res
judicata lays the rule that
an existing final judgment or decree rendered on the merits, and without fraud
or collusion, by a court of competent jurisdiction, upon any matter within its
jurisdiction, is conclusive of the rights of the parties or their privies, in
all other actions or suits in the same or any other judicial tribunal of
concurrent jurisdiction on the points and matters in issue in the first suit.[28]
The elements of res judicata are:
(1) the
judgment sought to bar the new action must be final;
(2) the decision must have been rendered by a court having
jurisdiction over the subject matter and the parties;
(3) the disposition of the case must be a judgment on the
merits; and
(4) there must be as between the first and second action
identity of parties, subject matter, and causes of action.[29]
In their petition, the Spouses Torres do
not dispute the presence of the first three elements. They, however, dispute
the presence of the last element, specifically arguing that the evidence
necessary to establish the cause of action in Civil Case No. Q-99-38781 is
different from that of Civil Case No. Q-94-18962. The Spouses Torres
conclude that the evidence is not identical so as to place the causes of action
within the prohibition based on res
judicata.[30]
This Court is not persuaded.
To reiterate, in Civil Case No.
Q-99-38781, the Spouses Torres raised the following causes of action:
a) the December 20, 1993 Deed of Real Estate Mortgage does not
contain a period or term; hence, performance of the obligation has not yet
become due as there is a need for judicial determination of the period or term;
b) the June 28, 1994 Statement of Account is not the loan
contemplated by law; therefore, it cannot serve as basis to foreclose
extrajudicially the mortgage;
c) the credit transaction is either void or unenforceable due
to breach of Section 6(a) of Republic Act No. 3765, otherwise known as “The
Truth in Lending Act”;
d) Since appellee sued appellants for violation of Batas
Pambansa Blg. 22, there could arise a situation of double recovery of damages
which is proscribed by law. If the extrajudicial foreclosure will be allowed
and if appellants will be made to pay the amount of the checks subject of the criminal
suit under B.P. Blg. 22, it would result in the unjust enrichment of appellee.[31]
This Court has previously employed various
tests in determining whether or not there is identity of causes of action as to
warrant the application of the principle of res
judicata. One test of identity is the "absence of inconsistency
test" where it is determined whether the judgment sought will be
inconsistent with the prior judgment. If no inconsistency is shown, the prior
judgment shall not constitute a bar to subsequent actions.[32]
This Court finds that the first three
causes of action inevitably deal with the validity of the real estate mortgage. Although the Spouses Torres do
not admit it, the conclusion is certain in that any affirmative relief that
this Court may grant on said causes of action would affect the validity of the
real estate mortgage; an issue which could no longer be revived, as the same
has been settled.
In Civil Case No. Q-94-18962, the Spouses
Torres already assailed the validity of the Real Estate Mortgage dated December 20, 1993 as evidenced from the reliefs sought
for by them, to wit:
WHEREFORE, premises considered, it is respectfully prayed
of this Honorable Court to render judgment as follows:
1. Declaring the x x x Deed of Real Estate Mortgage dated 20 December 1993 (Exhibit E) void;
2. Declaring that x x x all RCBC checks issued pursuant to the
Deed of Real Estate Mortgage dated 20
December 1993 as likewise void;
3. Directing defendant Register of Deeds of Quezon City to
cancel the annotation of the real estate mortgage in TCT No. RT-61056; x x x [33]
In dismissing the Complaint,
the RTC decision in Civil Case No. 94-18962 was categorical in upholding the
validity of the instrument, to wit:
The
contention that the Deed of Real Estate Mortgage dated December 20, 1993 should also be annulled being the
fruit of the previous voidable contracts deserves scant consideration. The same
was found to have the essential elements of a valid contract x x x.
x
x x x
Corollarily,
the Deed of Real Estate Mortgage, dated December
20, 1993, being perfectly valid, defendant Amparo Medina has the right to its
registration in her favor. x x x [34]
It bears stressing that the doctrine of res judicata actually embraces two different
concepts: (1) bar by former judgment and (b) conclusiveness of judgment.
The second concept – conclusiveness of
judgment – states that a fact or question which was in issue in a former suit
and was there judicially passed upon and determined by a court of competent
jurisdiction, is conclusively settled by the judgment therein as far as the
parties to that action and persons in privity with them are concerned and
cannot be again litigated in any future action between such parties or their
privies, in the same court or any other court of concurrent jurisdiction on
either the same or different
cause of action, while the judgment remains unreversed by proper authority. It
has been held that in order that a judgment in one action can be conclusive as
to a particular matter in another action between the same parties or their
privies,it is essential that the issue be identical. If a particular point or
question is in issue in the second action, and the judgment will depend on the
determination of that particular point or question, a former judgment between
the same parties or their privies will be final and conclusive in the second if
that same point or question was in issue and adjudicated in the first suit. Identity of cause of action is not
required, but merely identity of issues.[35]
Based on the foregoing, the
validity of the real estate mortgage can no longer be attacked, more so because
the decision in Civil Case No. Q-94-18962 has become final and Entry of Judgment has already been entered in
our books.
It therefore goes
without saying that the foreclosure of the mortgage is a right given to Medina as the same is embodied in the Deed of
Real Estate Mortgage, to wit:
x x x x
That
it is further understood that if the MORTGAGOR shall well and truly perform the
obligation above contracted then this Mortgage shall be null and void; otherwise, it shall remain in full
force and effect and may be foreclosed extrajudicially under Act 3135 as
amended.[36]
Thus, this Court finds no
error in the decisions of the lower court and the appellate court declaring
that there exists, in fact, res
judicata. As succinctly
put in FELS Energy, Inc. v. Province of Batangas,[37] res judicata, as a ground for dismissal, is based on two grounds, namely:
(1) public
policy and necessity, which makes it to the interest of the State that there
should be an end to litigation --- republicae
ut sit litium; and (2) the hardship on the individual of being vexed twice
for the same cause --- nemo
debet bis vexari et eadem causa. A
conflicting doctrine would subject the public peace and quiet to the will and
dereliction of individuals and prefer the regalement of the litigious
disposition on the part of suitors to the preservation of the public
tranquility and happiness.[38]
Anent the fourth cause of action
in Civil Case No. Q-99-38781, this Court finds that the Spouses Torres had
already raised, in Civil Case No. 94-18962, the fact that eleven (11) counts of
Batas Pambansa Bilang (B.P. Blg.) 22 violations are pending with Branch 36,
Metropolitan Trial Court (MeTC), Quezon City.[39] Thus, the RTC is correct in its
observation that res judicata lies, as the Rizal Commercial
Banking Corporation (RCBC) checks referred to in the complaint in Civil Case
No. Q-99-38781 are the very same documents subject of Civil Case No.
Q-94-18962.[40]
The foregoing findings
notwithstanding, the Spouses Torres contend that the election of Medina from sue them for violation of B.P
Blg. 22 bars Medina from the remedy of foreclosure of
mortgage. The Spouses
Torres, citing Bank of America
NT & SA v. American Realty Corporation (Bank of America),[41] thus argue:
x x x the remedies available to the mortgage creditor are deemed
alternative and not cumulative. Notably, an election of one remedy operates as
a waiver of the other. For this purpose, a remedy is deemed chosen upon the
fling of the suit for collection or upon the filing of the complaint in an
action for foreclosure of mortgage, pursuant to the provision of Rule 68 of the
1997 Rules of Civil Procedure. As to extrajudicial foreclosure, such remedy is
deemed elected by the mortgage creditor upon filing of the petition not with
any court of justice but with the Office of the Sheriff of the province where
the sale is to be made, in accordance with the provisions of Act No. 3135, as
amended by Act No. 4118.[42]
The argument of the Spouses
Torres is misplaced. The
doctrine found in Bank of
America, and in related
cases, finds no application to the case at bar, as the filing of a B.P. Blg. 22 case is not the
“collection suit” contemplated by law and jurisprudence, which bars a mortgagee
from later on electing to foreclose the mortgaged property.
Section 1 of B.P. Blg. 22
provides:
Section 1. Checks
without sufficient funds. - Any person
who makes or draws and issues any check to apply on account or for value,
knowing at the time of issue that he does not have sufficient funds in or
credit with the drawee bank for the payment of such check in full upon its
presentment, which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the same
reason had not the drawer, without any valid reason, ordered the bank to stop
payment, shall be punished by
imprisonment of not less than thirty days but not more than one (1) year or by
a fine of not less than but not more than double the amount of the check which
fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and
imprisonment at the discretion of the court.
It bears stressing that in Que v. People,[43] this Court stated that the clear intention
of the framers of B.P. Blg. 22 is to make the mere act of issuing a worthless
check malum prohibitum. In
prosecutions for violation of B.P. Blg. 22 therefore, prejudice or damage is
not a pre-requisite for conviction. In
the later case of People v.
Nitafan,[44] this Court ruled that the agreement
surrounding the issuance of the checks need not be first looked into since the
law has clearly provided that the mere issuance of any kind of check,
regardless of the intent of the parties, i.e., whether the check is intended merely
to serve as a guarantee or deposit, but which check is subsequently dishonored,
makes the person who issued the check liable. The intent of the law is to curb
the proliferation of worthless checks as a means of payment of obligations.
That B.P. Blg .22 is not the
“collection suit” contemplated by law can be seen by the fact that the law
seeks to punish the mere issuance of a “bum” check notwithstanding the presence
of damage or prejudice to the offended party.
Lastly, the Spouses Torres also argue
that the equitable principle of unjust enrichment bars the extrajudicial
foreclosure of the mortgage, in the wise:
If
private respondent Amparo Medina were to be allowed the extrajudicial
foreclosure that she caused to be conducted, and eventually owned the
properties covered by TCT No. RT-61056 (354973) and at the same time is awarded
the sum of Php 4,730,000.00 (including interest) in the eleven (11) counts of
B.P. Blg. 22 violations now pending at the Metropolitan Trial Court of Quezon
City, Branch 36, then she would have recovered twice the same loan transaction
that took place in the first quarter of 1993. Private respondent Amparo Medina
will be twice richer.[45]
Again, these arguments are
misplaced. In Lazaro v. Court of Appeals,[46] notwithstanding petitioner Lazaro’s
claim that she had already paid her obligation, this Court still found her
liable for violation of B.P Blg. 22, thus:
That the obligation of Marlyn Lazaro to complainant Chua
has been extinguished by the conveyance by the former of her car to Chua does
not also justify the cancellation of the indemnity awarded. It should be noted
that BP 22 provides that a fine of not less than but not more than
double the amount of the dishonored check may be imposed by the court. In the case of Esler vs. Ledesma, this Court stated that a
fine is a pecuniary punishment imposed by a lawful tribunal upon a person
convicted of a crime. Clearly,
the fine provided for in BP 22 was intended as an additional penalty for the act of issuing a worthless
check. This is the only logical conclusion, since the law does not require that
there be damage or prejudice to the individual complainant by reason of the
issuance of the worthless check.[47]
There can be no double
compensation as the indemnity award is distinct from the underlying obligation
of the check. Thus, a
person guilty of violating B.P Blg. 22 may be subject to imprisonment or a fine
at the discretion of the court and the fact that the underlying obligation has
been paid is of no moment. There
will be instances, of course, that the court will also order the guilty party
to pay the face value of the check if the underlying obligation has not yet
been satisfied; however, the same will not apply to the case at bar, as Medina
has already been compensated for the loan after foreclosing the mortgage. The Spouses Torres will,
therefore, only have to pay a fine or suffer imprisonment if found guilty in
their pending cases for violation of B.P. Blg. 22 subject to the rule of
preference embodied in Supreme Court Administrative Circular 12-2000.[48]
The Spouses Torres argue that res judicata should not apply if it will sacrifice
justice to technicality.[49] Indeed, as cited by the Spouses Torres,
this Court has on occasion disregarded the application of res judicata, however, this
Court finds that the same consideration should not be given in herein petition.
In the first place, the Spouses Torres
only filed their complaint in Civil Case No. Q-99-38781 after more than two
years had already lapsed from the time the ex-officio sheriff sold the property in question
at public auction. The foreclosure proceeding was an action in rem, and therefore, the Spouses
Torres cannot feign knowledge thereof. More importantly, the Spouses Torres
were not completely left without any remedy as they still had the right of
redemption, which expired one year from and after the date of the registration
of the Certificate of Sale. In the absence of evidence to the contrary, this
Court must assume that no attempt to redeem the property was undertaken by the
Spouses Torres and that they simply allowed their right and remedy to lapse by
their inaction.
In addition, the Spouses Torres have
already lost their right to question the validity of the real estate mortgage,
for most part due to the negligence of their counsel.[50] More importantly, the decision upholding
the validity of the real estate mortgage is already final; hence, the same can
no longer be questioned in another proceeding by simply varying the form of the
action, or adopting a different method of presenting their case.[51]
WHEREFORE, premises considered, the petition is DENIED. The August 30, 2004 Decision and January 18, 2005 Resolution of the Court of Appeals in
CA-G.R. CV No. 75847 are AFFIRMED.
SO ORDERED.
DIOSDADO M. PERALTA
Associate Justice